IDEAS home Printed from https://ideas.repec.org/a/wly/emetrp/v88y2020i5p1939-1963.html
   My bibliography  Save this article

Non‐Clairvoyant Dynamic Mechanism Design

Author

Listed:
  • Vahab Mirrokni
  • Renato Paes Leme
  • Pingzhong Tang
  • Song Zuo

Abstract

We introduce a new family of dynamic mechanisms that restricts sellers from using future distributional knowledge. Since the allocation and pricing of each auction period do not depend on the type distributions of future periods, we call this family of dynamic mechanisms non‐clairvoyant. We develop a framework (bank account mechanisms) for characterizing, designing, and proving lower bounds for dynamic mechanisms (clairvoyant or non‐clairvoyant). We use the same methods to compare the revenue extraction power of clairvoyant and non‐clairvoyant dynamic mechanisms.

Suggested Citation

  • Vahab Mirrokni & Renato Paes Leme & Pingzhong Tang & Song Zuo, 2020. "Non‐Clairvoyant Dynamic Mechanism Design," Econometrica, Econometric Society, vol. 88(5), pages 1939-1963, September.
    • Handle: RePEc:wly:emetrp:v:88:y:2020:i:5:p:1939-1963
    DOI: 10.3982/ECTA15530
    as

    Download full text from publisher

    File URL: https://doi.org/10.3982/ECTA15530
    Download Restriction: no
    File URL: https://libkey.io/10.3982/ECTA15530?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Alessandro Pavan & Ilya Segal & Juuso Toikka, 2008. "Dynamic Mechanism Design: Incentive Compatibility, Profit Maximization and Information Disclosure," Carlo Alberto Notebooks 84, Collegio Carlo Alberto.
    2. Dirk Bergemann & Stephen Morris, 2012. "Robust Mechanism Design:The Role of Private Information and Higher Order Beliefs," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 8318, January.
    3. Bruno Biais & Thomas Mariotti & Guillaume Plantin & Jean-Charles Rochet, 2007. "Dynamic Security Design: Convergence to Continuous Time and Asset Pricing Implications," Review of Economic Studies, Oxford University Press, vol. 74(2), pages 345-390.
    4. Alex Gershkov & Benny Moldovanu, 2009. "Dynamic Revenue Maximization with Heterogeneous Objects: A Mechanism Design Approach," American Economic Journal: Microeconomics, American Economic Association, vol. 1(2), pages 168-198, August.
    5. Dirk Bergemann & Stephen Morris, 2012. "Robust Mechanism Design," World Scientific Book Chapters, in: Robust Mechanism Design The Role of Private Information and Higher Order Beliefs, chapter 2, pages 49-96, World Scientific Publishing Co. Pte. Ltd..
    6. Gershkov, Alex & Moldovanu, Benny, 2010. "Efficient sequential assignment with incomplete information," Games and Economic Behavior, Elsevier, vol. 68(1), pages 144-154, January.
    7. Mallesh Pai & Rakesh Vohra, 2008. "Optimal Dynamic Auctions," Discussion Papers 1461, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    8. Dirk Bergemann & Juuso Välimäki, 2019. "Dynamic Mechanism Design: An Introduction," Journal of Economic Literature, American Economic Association, vol. 57(2), pages 235-274, June.
    9. Manelli, Alejandro M. & Vincent, Daniel R., 2007. "Multidimensional mechanism design: Revenue maximization and the multiple-good monopoly," Journal of Economic Theory, Elsevier, vol. 137(1), pages 153-185, November.
    10. Thomas, Jonathan & Worrall, Tim, 1990. "Income fluctuation and asymmetric information: An example of a repeated principal-agent problem," Journal of Economic Theory, Elsevier, vol. 51(2), pages 367-390, August.
    11. Bergemann, Dirk & Valimaki, Juuso, 2006. "Dynamic price competition," Journal of Economic Theory, Elsevier, vol. 127(1), pages 232-263, March.
    12. Said, Maher, 2012. "Auctions with dynamic populations: Efficiency and revenue maximization," Journal of Economic Theory, Elsevier, vol. 147(6), pages 2419-2438.
    13. Sham M. Kakade & Ilan Lobel & Hamid Nazerzadeh, 2013. "Optimal Dynamic Mechanism Design and the Virtual-Pivot Mechanism," Operations Research, INFORMS, vol. 61(4), pages 837-854, August.
    14. Simon Board, 2008. "Durable-Goods Monopoly with Varying Demand," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(2), pages 391-413.
    15. Baron, David P. & Besanko, David, 1984. "Regulation and information in a continuing relationship," Information Economics and Policy, Elsevier, vol. 1(3), pages 267-302.
    16. Jérémie Gallien, 2006. "Dynamic Mechanism Design for Online Commerce," Operations Research, INFORMS, vol. 54(2), pages 291-310, April.
    17. Said, Maher, 2008. "Information Revelation and Random Entry in Sequential Ascending Auctions," MPRA Paper 7160, University Library of Munich, Germany.
    18. R. Vijay Krishna & Giuseppe Lopomo & Curtis R. Taylor, 2013. "Stairway to heaven or highway to hell: Liquidity, sweat equity, and the uncertain path to ownership," RAND Journal of Economics, RAND Corporation, vol. 44(1), pages 104-127, March.
    19. Devanur, Nikhil R. & Peres, Yuval & Sivan, Balasubramanian, 2019. "Perfect Bayesian Equilibria in repeated sales," Games and Economic Behavior, Elsevier, vol. 118(C), pages 570-588.
    20. Matthew O Jackson & Hugo F Sonnenschein, 2007. "Overcoming Incentive Constraints by Linking Decisions -super-1," Econometrica, Econometric Society, vol. 75(1), pages 241-257, January.
    21. Roger B. Myerson, 1981. "Optimal Auction Design," Mathematics of Operations Research, INFORMS, vol. 6(1), pages 58-73, February.
    22. Alessandro Pavan & Ilya Segal & Juuso Toikka, 2014. "Dynamic Mechanism Design: A Myersonian Approach," Econometrica, Econometric Society, vol. 82(2), pages 601-653, March.
    23. Raphael Boleslavsky & Maher Said, 2013. "Progressive Screening: Long-Term Contracting with a Privately Known Stochastic Process," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(1), pages 1-34.
    24. Akan, Mustafa & Ata, Barış & Dana, James D., 2015. "Revenue management by sequential screening," Journal of Economic Theory, Elsevier, vol. 159(PB), pages 728-774.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Papadimitriou, Christos & Pierrakos, George & Psomas, Alexandros & Rubinstein, Aviad, 2022. "On the complexity of dynamic mechanism design," Games and Economic Behavior, Elsevier, vol. 134(C), pages 399-427.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tao Zhang & Quanyan Zhu, 2019. "On Incentive Compatibility in Dynamic Mechanism Design With Exit Option in a Markovian Environment," Papers 1909.13720, arXiv.org, revised May 2021.
    2. Dirk Bergemann & Maher Said, 2010. "Dynamic Auctions: A Survey," Levine's Working Paper Archive 661465000000000035, David K. Levine.
    3. Santiago R. Balseiro & Vahab S. Mirrokni & Renato Paes Leme, 2018. "Dynamic Mechanisms with Martingale Utilities," Management Science, INFORMS, vol. 64(11), pages 5062-5082, November.
    4. Tao Zhang & Quanyan Zhu, 2022. "On Incentive Compatibility in Dynamic Mechanism Design With Exit Option in a Markovian Environment," Dynamic Games and Applications, Springer, vol. 12(2), pages 701-745, June.
    5. Bergemann, Dirk & Pavan, Alessandro, 2015. "Introduction to Symposium on Dynamic Contracts and Mechanism Design," Journal of Economic Theory, Elsevier, vol. 159(PB), pages 679-701.
    6. Said, Maher, 2012. "Auctions with dynamic populations: Efficiency and revenue maximization," Journal of Economic Theory, Elsevier, vol. 147(6), pages 2419-2438.
    7. Hinnosaar, Toomas, 2017. "Calendar mechanisms," Games and Economic Behavior, Elsevier, vol. 104(C), pages 252-270.
    8. Garrett, Daniel F., 2017. "Dynamic mechanism design: Dynamic arrivals and changing values," Games and Economic Behavior, Elsevier, vol. 104(C), pages 595-612.
    9. Dirk Bergemann & Juuso Välimäki, 2019. "Dynamic Mechanism Design: An Introduction," Journal of Economic Literature, American Economic Association, vol. 57(2), pages 235-274, June.
    10. Dirk Bergemann & Alessandro Pavan, 2015. "Introduction to JET Symposium Issue on "Dynamic Contracts and Mechanism Design"," Cowles Foundation Discussion Papers 2016, Cowles Foundation for Research in Economics, Yale University.
    11. Papadimitriou, Christos & Pierrakos, George & Psomas, Alexandros & Rubinstein, Aviad, 2022. "On the complexity of dynamic mechanism design," Games and Economic Behavior, Elsevier, vol. 134(C), pages 399-427.
    12. Emil Temnyalov, 2019. "Points mechanisms and rewards programs," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(3), pages 436-457, June.
    13. Sham M. Kakade & Ilan Lobel & Hamid Nazerzadeh, 2013. "Optimal Dynamic Mechanism Design and the Virtual-Pivot Mechanism," Operations Research, INFORMS, vol. 61(4), pages 837-854, August.
    14. Krasikov, Ilia & Lamba, Rohit, 2021. "A theory of dynamic contracting with financial constraints," Journal of Economic Theory, Elsevier, vol. 193(C).
    15. Deb, Rahul & Said, Maher, 2015. "Dynamic screening with limited commitment," Journal of Economic Theory, Elsevier, vol. 159(PB), pages 891-928.
    16. Alex Gershkov & Benny Moldovanu & Philipp Strack, 2018. "Revenue-Maximizing Mechanisms with Strategic Customers and Unknown, Markovian Demand," Management Science, INFORMS, vol. 64(5), pages 2031-2046, May.
    17. Arve, Malin & Zwart, Gijsbert, 2023. "Optimal procurement and investment in new technologies under uncertainty," Journal of Economic Dynamics and Control, Elsevier, vol. 147(C).
    18. Hao Li & Xianwen Shi, 2017. "Discriminatory Information Disclosure," American Economic Review, American Economic Association, vol. 107(11), pages 3363-3385, November.
    19. Bergemann, Dirk & Strack, Philipp, 2022. "Progressive participation," Theoretical Economics, Econometric Society, vol. 17(3), July.
    20. Negin Golrezaei & Hamid Nazerzadeh & Ramandeep Randhawa, 2020. "Dynamic Pricing for Heterogeneous Time-Sensitive Customers," Manufacturing & Service Operations Management, INFORMS, vol. 22(3), pages 562-581, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:emetrp:v:88:y:2020:i:5:p:1939-1963. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/essssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.